Agriculture

Agriculture accounts for about a seventh of Belarus economic output. Belarus has a large amount of farmland. But a short growing season and a lack of fertile soil make farming difficult. Most of Belarus has soils of only moderate fertility, but the better-drained uplands can be productive with fertilizer application.

Most of the country has mixed crop and livestock farming, with a strong emphasis on flax growing. The country’s principal crops are potatoes, grains (especially wheat, barley, oats and rye), flax, fruits, sunflowers and sugar beets. Nearly 60 percent of the country's total land area is cultivated. Arable land accounts for about 30 percent of the country's land use and meadows and pastures account for 15 percent. The 1986 explosion at the Chernobyl nuclear power station in Ukraine contaminated much of the soil in southern reducing the country's total area of arable land by more than 10 percent. Livestock breeding is another main component of agriculture. Cattle, hogs and sheep are the most important livestock raised in the country.

SERVICE

Service industries are industries that produce services, not goods. In the recent past these industries were underdeveloped in Belarus. Most service-industry workers were poorly trained and underpaid. They had little incentive to satisfy their customers, who competed for services that were in short supply. Today private economic activity in the service sector is flourishing. Many individuals and families are starting small businesses such as restaurant, barber-shops, dry cleaners and taxi services.

FINANCE

Independent Belarus restructured its banking system into a system consisting of the National Bank of Belarus and a number of commercial banks, most of which are either joint-stock or limited- liability companies. A securities market and stock exchange were also established. The republic introduced its own currency, the Belarusian ruble, in 1994. It has been unofficial national currency since January 1995, when circulation of Russian rubles ceased. In 1994 Belarus and Russia agreed to the eventual merger of their monetary systems, but Russia has delayed the merger because of the high inflation and other economic problems in Belarus. The central hank is the National Bank of Belarus in Minsk.

Foreign trade

Belarus proper consumes only 13% of the goods produced. A great amount of goods produced by Belarusian industries and agriculture is oriented towards the CIS countries’ markets. The main trade partners of Belarus are Russia, Poland, (the) Ukraine, Germany and Italy. Belarus also conducts trade with Austria, China, Great Britain, Switzerland, the United Slates and other countries.

Questions:

1. What are the natural resources in the republic?

2. In what production does Belarus agriculture specialize today?

3. What is the republic’s industry characterized by?

4. What is the economic situation in Belarus now?

5. What have you learnt about the banking system of Belarus?

Study the information:

Belarus takes great stride forward and transforms its economy taking account of the outer world realities. It could not pass unnoticed by foreign investors. During the recent years a firm tendency towards inflow of foreign capital has been observed. Starting since 2002, foreign investments in the amount of more than 4.6 billion USD have been placed in Belarus, including direct foreign investments in the amount of about 2.2 billion USD. But what attracts foreign investments?

■ Five Reasons for Making Profitable Investment in the Republic of Belarus

• Favourable economic and geographical location

• Favourable investment climate

• Political, social,, and economic stability

• Developed industrial, scientific and export potential

• Highly skilled manpower which has accumulated experience of work at modern enterprises

Favourable economic and geographical location

Belarus lies along the eastern boundary of the European Union and in a sense can serve as a base for foreign investors from the angle of the development of new promising CIS markets. Well-developed motor-road and railway networks between the EU member-states and CIS contribute to this fact. And the common customs area with Russia ensures free access of any potential investor to huge capacities of the Russian territory.

Favourable investment climate

Belarus has got a well-elaborated investment legislation aimed at encouragement of investment activities, governmental support thereof, and protection of investors' rights in the territory of the Republic. Foreign Investment Advisory Council headed by the Prime Minister is functioning in the country. Six free economic areas exist providing for preferential terms of activities. Creation of the National Investment Agency is in progress.

Political, social, and economic stability

Sustainable development has become noticeable in Belarus in the recent years. Growth of such integrating factor as gross domestic product (GDP) made 4.7% in 2001, 5% in 2002, 6.8% in 2003,11% in 2004, 9.2% in 2005. The positive moving forces and trends of economic development have been also mentioned by foreign international organizations. In particular, according to the World Bank, "growth of gross domestic product in 1996-2000 made 77.4%". At the same time, "economic growth is not a statistical phenomenon in Belarus, but a real fact", which main moving forces are the increase in labour productivity, improvement of efficiency of energy utilization and production capacity utilization.

Together with the country's stable political situation, low crime and corruption rate, absence of any conflicts of national or religious nature, such indices attract more and more investors to this country every year.